GO Annual Report 2015

Annual Report and Accounts 2015

HELPING BUSINESSES, FAMILIES AND
FRIENDS TO STAY CONNECTED

GO is Malta’s leading telecommunications
services organisation, with over 500,000
customer connections. The first quadruple play
operator in the market, GO is a converged and
integrated telecommunications group, offering
an unparalleled range of services: fixed line
telephony; mobile telephony; broadband
Internet services and digital television. GO
also provides business-related services, such
as data networking solutions, business IP
services, managed and co-location facilities.

GO’s growth is the result of a focused strategy
of delivering international standard products
and services, and a first rate customer
experience. The Group invests heavily
in technology and infrastructure, with an
ambitious investment programme comprising
a number of far-sighted projects, such as
4G and providing fibre to the home, thereby
creating a resilient and unmatched network
that is revolutionising Malta’s connectivity.

GO is listed on the Malta Stock Exchange.

GO ANNUAL REPORT 2015

CONTENTS

02 2015 at a Glance
04 Chairman’s Message
07 Chief Executive Officer’s Review
12 Commercial Review
18 GO in the Community
22 Board of Directors
23 Directors’ Report
28 Corporate Governance – Statement of Compliance
34 Remuneration Committee Report
36 Independent Auditor’s Report

38 Financial Statements
39 Statements of Financial Position
41 Income Statements
42 Statements of Comprehensive Income
43 Statements of Changes in Equity
47 Statements of Cash Flows
48 Notes to the Financial Statements

127 Five Year Record
128 Company Information

02 2015 AT A GLANCE

2015 AT A GLANCE

The Group is Malta’s leading provides business clients with data
integrated telecommunications centre facilities and ICT solutions.
services provider and its high speed GO continues to connect more
networks form the backbone of the clients to its mobile, broadband and
island’s modern communications TV networks, growing its customer
infrastructure. The services provided base in 2015 and now servicing well
by the Group include fixed-line in excess of 500,000 customer
and mobile telephony, data and connections, which is, by far, the
TV services for consumers and largest customer base of any
business clients. The Group also operator in Malta.

Following on from its positive This game-changing development
performance during 2015, in January is one with far-reaching implications
2016 GO increased its minority stake for GO, which now also operates in
and acquired a majority shareholding a market which is double the size of
in Cablenet Communications its domestic market in Malta. GO’s
Systems Limited, the Cypriot ‘triple increased stake in Cablenet also
play’ telecommunications company. enables the Group to leverage clear
Cablenet continues to perform synergies between GO and Cablenet,
strongly, growing customer numbers and to share winning strategies in a
and profitability across its broadband number of areas in a market that has
Internet, fixed telephony and digital many similarities to Malta.
HD TV portfolio.

€123.7M The Group’s strong performance to achieve growth in retail activities
clearly demonstrates GO’s ongoing within the context of a fiercely
IN REVENUE ability to out-perform the sector competitive market and constantly
and is also in stark contrast evolving customer expectations.
to the challenges being faced
in many other EU markets. In This growth more than compensated
2015, the Group reported stable for the decline in wholesale activity
revenue streams of €123.7 million, experienced as a result of continued,
an increase of 1.2% over the and disproportionate, regulation at
comparative year, as it continues both local and EU level.

COSTS The drive to increase efficiencies, for pension obligations), the Group’s
and manage costs, in a planned and cost of sales and administrative
2.8% sustainable manner, is as important costs declined by 2.8% to €96.3
as the effort to grow revenues. million (2014: €99.1 million), as GO
During 2015, excluding items of maintains its focus on managing costs
unusual nature, size or incidence – without diluting or compromising
(such as those relating to voluntary the customer experience.
retirement schemes and provisions

GO ANNUAL REPORT 2015 03

PRE TAX PROFIT OF 2015 has been an excellent year Group operating profit reached
for GO and its shareholders, with €27.8 million in 2015 (up from €21.8
€34.2M increased profitability and healthy million in 2014), an increase of 27.9%.
cash flows as a result of a proven Normalised operating profit improved
programme that is delivering growth from €24.4 million in 2014 to €29.0
and control over costs. During the million in 2015, representing growth
year, the GO Group reported pre-tax of 19%. On a normalised basis, group
profit of €34.2 million, as it continued EBITDA amounted to €52.8 million
to register a strong performance in its (2014: €49.2 million) an increase of
core operations. 7.3% over the prior year.

€60 MILLION few years, and will further future-proof
INVESTED IN FIBRE & 4G a communications infrastructure that
The large-scale, multi-year, is, literally, second to none.
investment programmes in GO’s core
telecommunications infrastructure Superfast Internet fibre connections
in Malta is proceeding smoothly, and will mean customers will be able to
the Group is well on track, both with use the Internet in ways that until now
the ongoing roll out of Fibre-To-The- one can only have imagined, both
Home and fibre connected 4G. These from a business perspective and for
require significant capital investment, those looking for the ultimate home
in excess of €60 million over the next TV and gaming experience, whilst the
investment in 4G will offer a superior
mobile Internet service.

2015 REVENUE €14.2M Not only is GO truly a diversified In 2015, data services accounted for no
– €123.7MILLION quad play telecommunications player, less than 11.5% of total Group revenue
increasingly, it is also diversifying to from external customers, representing
€109.5M become a one stop shop for all the a steady year-on-year increase. It is
communications and ICT needs of worth noting that during 2015, GO
Data Services business located in, and operating from, entered into a preliminary agreement
Telecommunications Malta. This is achieved by combining to acquire a majority stake in ICT
traditional core competencies specialists Kinetix, which acquisition
in fixed, mobile telephony and was concluded early in 2016. This
Internet, with hosting, data and further strengthens GO’s ability to
cloud services which are provided service business customers.
by the Group’s subsidiary BMIT.

UNLOCKING VALUE FROM This is a major milestone, following
PROPERTY PORTFOLIO the development and implementation
During the year GO completed over a number of years of a
the spin-off of its property arm, strategy aimed at delivering value
Malta Properties Company p.l.c. to shareholders from the Group’s
(formerly known as Malta Properties extensive property portfolio. As a
Company Limited), which is now result of the spin-off, shareholders
quoted separately on the Malta enjoyed a net dividend of €0.3313,
Stock Exchange. the highest in the Company’s history.

04 CHAIRMAN’S MESSAGE

CHAIRMAN’S MESSAGE

HIGHLIGHTS FOR 2015

TODAY, THE GROUP HAS A MORE

INTERNATIONAL DIMENSION, A HEALTHY

AND PROFITABLE BUSINESS

MODEL, DIVERSIFIED INCOME STREAMS,
A NUMBER OF STRONG BRANDS AND A

FOCUSED SENIOR MANAGEMENT

TEAM DRIVING A ROBUST AND SUCCESSFUL
STRATEGY THAT WILL CONTINUE TO DELIVER.

WELL PREPARED FOR GO’S NEXT CHAPTER The process of selling a company as large, and as multifaceted,
As Chairman of our Company, it is my duty, together with the as GO is complex and not without its own challenges. Throughout,
Board of Directors, to safeguard the interests of all shareholders, to however, the focus of the Board has remained on securing the
deliver an attractive return to them, and to enhance and grow the best possible bid, one which reflects the genuine value, and future
underlying value of their investment. It is a responsibility not taken potential, of the Company.
lightly, and not without its own burdens, so it is satisfying to note,
as GO now prepares to write the next chapter in its successful GROWING VALUE
history, just how well placed the Group is to forge ahead. As those who follow our performance will doubtless have noted,
the value of GO has been steadily growing over recent years. The
In many ways, these are momentous times for our Group, potential sale of GO’s entire shareholding now follows a year in
a time during which several major strategic initiatives are which several initiatives added further value and made GO even
coming to fruition, in line with our long term plans, and a time more attractive.
where the rewards for our efforts, and of our perseverance, are
becoming amply clear. Today the Group has a more international The spin-off of Malta Properties Company, approved by another
dimension, a healthy and profitable business model, diversified Extraordinary General Meeting, which took place in July, did not
income streams, a number of strong brands and a focused senior only deliver the immediate value of a special dividend of €33.6
management team driving a robust and successful strategy that million which benefited all GO shareholders. Additionally, as a
will continue to deliver. separate entity but with contractual obligations with GO, MPC is
now able to focus on creating physical environments which are
THE SALE PROCESS tailor made to GO’s requirements and on new initiatives aimed
In July, Emirates International Telecommunications, our majority at enhancing its portfolio of premium properties and pursuing a
shareholder, announced its intention to dispose of its 60 per cent wider client base of well-established tenants.
shareholding in GO p.l.c.. Following this announcement the Board
of Directors decided that it would be in the best interests of all This will help GO continue consolidating and optimising its
shareholders to seek bids to purchase the entire shareholding. technical and operational functions across the entire product and
This would provide your Board with greater flexibility in its service offering. It is encouraging to see the achievement of a
negotiations with potential buyers and, at the same time, give all major milestone following the development and implementation
our investors the opportunity to benefit from the value generated over a number of years of a strategy aimed at delivering value to
through the sale. This view was endorsed by an Extraordinary shareholders from the Group’s extensive property portfolio.
General Meeting which took place in October and which also
authorised the Board to disclose all relevant information to
potential bidders.

GO ANNUAL REPORT 2015 05

Mr Deepak Padmanabhan
Chairman

06 CHAIRMAN’S MESSAGE

CHAIRMAN’S MESSAGE

CONTINUED

GROWING VALUE CONTINUED These results were delivered on the basis of revenue which
In line with our plans to internationalise GO’s outlook and pursue amounted to €123.7 million, an increase of 1.2% over the
growth, important decisions were also taken with regards to comparative year. It is important to also bear in mind the
the Group’s investment in Cablenet Communications Systems context of a fiercely competitive market and constantly evolving
Limited in Cyprus. Following the initial purchase of 25% of the customer expectations, which is also impacted by continued, and
issued share capital in 2014, GO has now taken up the option disproportionate, regulation at both local and EU level. In this
of converting a €12 million loan provided at the time of the scenario, the results highlight not only the fact that GO’s Board
initial investment into equity together with the option to acquire of Directors and executive team have been pursuing a sound
majority control. strategy but also the hard work of all Group employees.

This will have very significant implications, as GO effectively Amidst all the good news, 2015 proved once again to be a
becomes an operator in two European markets. Not only is the difficult year in Greece, both economically and politically. As a
potential market in Cyprus twice the size of that in Malta, but the result, Forgendo could not complete the sale of its shareholding
future incorporation of Cablenet’s results into GO’s coupled with in Forthnet. Consequently, the carrying amount of GO’s equity
the increasing value of the initial investment as both Cablenet investment in this joint venture could no longer be classified
and the Cypriot economy strengthen, will have a very noticeable, as ‘held for sale’ in the consolidated financial statements and
positive impact on GO’s results. has been restated to nil, in accordance with the requirements of
equity accounting.
A further investment with the potential to deliver long term
positive growth and contribute further to strengthening the value AN ACTIVE CORPORATE CITIZEN
of GO was the decision to acquire a majority stake in the Maltese As one of Malta’s largest and highest profile commercial entities,
ICT company Kinetix. This will definitely strengthen GO’s ability and a central player in the national economy, GO also has a
to service the communications and ICT requirements of GO’s responsibility towards the community. As technology continues
business customers. to advance, the risks associated with the digital divide are clear
and it remains important to do whatever we can to ensure that
Meanwhile, the large-scale, multi-year, investment programmes no one is left behind. GO continues to pursue an active Corporate
in GO’s core telecommunications infrastructure in Malta is Social Responsibility programme which includes particularly
proceeding, and are well on track both with the ongoing roll out significant support throughout the year for the Malta Community
of fibre connected 4G and Fibre-To-The-Home. Though these Chest Fund.
naturally both require significant capital investment, they will
further future-proof a communications infrastructure that is DELIVERING AN EVEN BETTER FUTURE
second to none. 2015 has certainly been a busy and undoubtedly very successful
year. It is encouraging to note also that the year has followed
EXCELLENT RESULTS several other successful ones, which demonstrates that – despite
On top of all this, GO also delivered an excellent financial all the challenges which GO has faced – the sound strategy
performance in 2015, generating a profit before tax of €34.2 adopted by the management team and the dedication of our
million, while the Group’s operating profit grew 27.9% to €27.8 employees deliver strong results.
million. This result was achieved from a combination of increased
revenue and reduction in costs. Normalised EBITDA increased by I am therefore extremely pleased to be in a position to reaffirm
7.3% to €52.8 million from €49.2 million in 2014. that GO has delivered for its customers, its shareholders, its
employees and for the society it operates in, to the benefit of
On the back of such a positive performance, your Board is in a the Maltese economy.
position to recommend a significant increase in dividend from
€0.07 paid in 2014 to €0.10 net of tax for 2015. And, I have no doubt, all this augurs well for the future.

GO ANNUAL REPORT 2015 07

CHIEF EXECUTIVE OFFICER’S REVIEW

HIGHLIGHTS FOR 2015

WE DELIVERED A STRONG

PERFORMANCE WITH PROFIT BEFORE TAX

REACHING €34.2M. OUR OPERATING

PROFIT AMOUNTED TO €27.8 MILLION, AN

INCREASE OF 27.9% ON THE

€21.8 MILLION RECORDED IN 2014.

A STRONG, ENCOURAGING, PERFORMANCE The Group also continues to do well in its data centre business
Once again, the GO Group has delivered what, on many fronts, and registered encouraging growth in a number of cloud-
is a very positive and encouraging year. We delivered a strong based services aimed primarily at businesses based in Malta.
performance with profit before tax reaching €34.2 million. Our As a result of all this, GO delivered robust levels of revenues,
operating profit amounted to €27.8 million, an increase of 27.9% profitability and cash generation from its core operations.
on the €21.8 million recorded in 2014. On a normalised basis,
Group EBITDA amounted to €52.8 million (2014: €49.2 million) On-going efforts to drive efficiency are also worth noting, as GO
an increase of 7.3% over the prior year. Normalised operating reduced operating costs by €2.8 million over 2014, a reduction of
profit improved from €24.4 million in 2014 to €29.0 million in 2.8%, without diluting the strength of its offering or the level of its
2015, representing growth of 19%. customer response.

GO continued to grow its customer base in 2015, and services BUILDING FOR THE FUTURE
well in excess of 500,000 customer connections, which is, by Of course, the strength of any company should be judged by
far, the largest customer base of any operator in Malta. GO the results it delivers over a number of years. It is therefore very
continues to connect more clients to its mobile, broadband and encouraging to note that, not only have we maintained a positive
TV networks, and this growth more than compensates for the momentum in recent years, but also that, throughout 2015, GO
marginal reduction in fixed-voice connections. continued to take the necessary decisions to ensure that such a
positive performance can be sustained in the foreseeable future.
Equally encouraging is the sustained growth in bundled service
as the Company’s Limitless, Homepack and Duopack product First and foremost, we have continued to invest in providing
lines retain their customer appeal, supported by our ongoing Malta with the communications infrastructure it needs to meet
investments in content, particularly premium TV drama, movies the increasing demands of customers and to ensure the country
and sport. We are, without doubt, also reaping the benefits of continues to compete successfully in the global economy. Our
sustained effort and investment in both infrastructure, and in very significant investments in Malta’s only fibre connected 4G
GO’s considerable human resources. network and in Fibre-To-The-Home (FTTH), which in total will
amount to well over €60 million, have continued.

08 CHIEF EXECUTIVE OFFICER’S REVIEW

CHIEF EXECUTIVE OFFICER’S REVIEW

CONTINUED

BUILDING FOR THE FUTURE CONTINUED and optimisation of ICT solutions for the corporate sector. Its
Nationwide 4G coverage is close at hand while more than incorporation into the GO Group allows us to further expand the
27,000 homes in various locations across Malta have been range of services we offer to our business customers.
passed with fibre. Combined, these two projects will give our
customers access to super-fast highly reliable Internet both at This also marks another step in GO’s ongoing progress to
home and on the move. becoming a one stop shop for all the communications and ICT
needs of the business community, combining traditional core
This will also enable the much heralded Internet of Things to competencies in fixed and mobile telephony, and Internet, with
become a reality, making all of our lives better. The fact that only hosting, data and cloud services provided by the continually
GO offers fibre connected 4G and fibre Internet directly into growing BMIT. This is now further enhanced with the ICT skills
customers’ premises gives us a significant point of difference of Kinetix. The ICT sector in Malta is, of course, a significant
over competing operators. Truly, we are developing an un- one, and one where there could be growth potential. But it is
matched, and future-proof, communications infrastructure that also fragmented and we believe that consolidating this service
gives GO a significant, and sustainable, competitive advantage. into the Group’s product portfolio therefore represents a good
development opportunity.
Additionally, in what was a very busy and productive year, 2015
also witnessed a number of other key developments which are Another area of significant change, which GO embarked upon in
designed to continue to deliver value in the coming years. The 2015, and which will continue to deliver results in the years ahead,
spin-off of Malta Properties Company p.l.c. not only generated was the launch of our new 5 year Transformation Programme.
considerable value for shareholders, but will also have an ongoing
positive effect on GO’s own operations as GO will be able to GO is now well on the way to becoming an agile e-company,
focus exclusively on its core business. making us more efficient and flexible and better able to
adapt our products and services to our customers’ fast
As recently announced, GO has also taken the decision to changing requirements.
acquire a majority shareholding in Cablenet Communications
Systems Limited, the Cypriot ‘triple play’ telecommunications LOOKING FORWARD WITH OPTIMISM
company. GO first invested in Cablenet in 2014, and over recent As outlined, a great many things have been accomplished,
months this company has continued to perform strongly, growing across all areas of the business, in 2015.
customer numbers and profitability across its broadband internet,
fixed telephony and digital HD TV portfolio. This game-changing The strong financial results are testament to the hard work not
development is one with far-reaching implications for GO, which only of the leadership team but of all GO staff. As a leading
now also operates in a market which is double the size of its provider of communications, IT and entertainment services,
domestic market in Malta. GO continues to operate successfully in a fiercely competitive
market which is highly regulated both in Malta and at EU level.
Malta itself continues to offer interesting areas of opportunity.
GO has invested in acquiring a controlling stake in the ICT firm Though achieving such success can never be taken for granted,
Kinetix, which specialises in the design, implementation, support GO has put in place the foundations and taken the necessary
decisions, to be able to look forward with considerable optimism.

GO ANNUAL REPORT 2015 09

Mr Yiannos Michaelides
Chief Executive Officer

10 CUSTOMER CONNECTIONS

GO ANNUAL REPORT 2015 11

500,000+
CUSTOMER
CONNECTIONS

As Malta’s first and leading quadruple play operator, GO
continued to increase its customer base across key growth
areas including mobile, TV, and Internet as well as business
related services like data networking solutions, business IP
services, managed and co-location facilities.

12 COMMERCIAL REVIEW

COMMERCIAL REVIEW

2015 WAS THE YEAR IN WHICH THE FUTURE ARRIVED Following the April announcement, we have continued to register
In April, GO launched a €50 million investment in Fibre-To-The- significant progress in the rollout of Fibre-To-The-Home. A number
Home. A real fibre network with fibre connected directly into of localities, including Sliema, St Julian’s, Gżira, Ta’ Xbiex, Pietà,
our customers’ premises, which will revolutionise how people Msida as well as parts of Lija, Attard and Mellieħa have already
use the Internet. The resulting dramatic increase in speed and seen some 27,000 households passed. Our Internet customers
data capacity will, not only build on GO’s high-quality Internet in Fibre-To-The-Home areas have seized the opportunity to
service, but will also vastly improve our customers’ TV and upgrade to Fibre. While clearly a very significant investment, it is
gaming experience. It will also herald the ‘Internet of Things’, a equally clear that the demand for Internet speed and capacity is
new era in which many more devices both at home and at work set to grow exponentially. In this new era, GO is the only national
will be connected to the Internet. In terms of entertainment, provider which is investing in a future proof network to deliver an
communication, home security, safety and energy efficiency, unmatched Internet service in Fibre areas.
among other areas, we will all be able to enrich our lives.

GO ANNUAL REPORT 2015 13

1

1. Set up at St Elmo for Valletta Summit.
2. Fibre cables connecting to server at Fort St Angelo for CHOGM.

2 Aside from these major investments, and resulting new services,
which will further cement GO’s position as the leading provider
Fibre was not the only major investment which GO committed of communications services in Malta, 2015 has been particularly
to in 2015. During the past year we also launched our 4G busy on a number of other fronts. TV remains a key area of
mobile Internet network. Our network is, in fact, the only local value for GO, particularly our Premium Sports channels and GO
4G network which is fully connected by a fully resilient fibre Stars HD, which provides the very latest and best TV drama and
network. This has a significant effect not only on the quality of movies. GO has continued to invest in more enriched content as
service experienced by customers but, most importantly, on its well as in providing customers with more flexible ways to access
resilience. While no system is 100% immune to faults, GO’s fibre- TV programmes wherever they are.
connected 4G network delivers an unmatched service, especially
in inclement weather. A clear example of this strategy came with GO’s investment
to secure the rights for the UEFA Champions League until
2018. This was accompanied by the launch of our Champions
League mobile App, available, for free, to GO Sports Premium
Interactive TV residential subscribers. This App gives customers
access to live text updates, in-match video clips and highlights,
in-depth statistics and live scores on their smart phones and
tablets, further complementing the live TV available on mobile
devices through TV Anywhere and the functionality provided to
customers in their homes through Interactive TV. Throughout
2015, GO Stars also continued to broadcast the world’s best
sport including Premier League, Serie A, Formula One, Rugby, and
Tennis and the very latest TV drama. Mad Men, Downton Abbey
and House of Cards were just some of the global hits, aired in
Malta by GO, normally within hours of their original broadcast in
the United States or United Kingdom.

14 COMMERCIAL REVIEW

COMMERCIAL REVIEW

CONTINUED
13

2

GO’s determination to provide the best TV experience in Malta by the first person they speak to. In addition to improving the
was rewarded with a Best Buy Award for offering the best customer experience, this exercise has also made our Call Centre
value for money digital television service for both local and more efficient, enabling us to answer more calls, quickly.
international TV channels in Malta. The award was based on an
independent survey on a representative sample of the Maltese Our investments in product improvement were, of course,
population carried out by Swiss organisation Icertias. supported by a number of successful marketing campaigns and
promotions. These ranged from doubling of data bundles to
The ongoing focus on providing the best possible customer new Pay As You GO customers, giving free access to GO Sports
experience was also evidenced by our updates to the Limitless and GO Stars HD to all TV customers for limited periods, and
mobile plans. These were simplified into three plans; Limitless offering customers who subscribe to GO’s Limitless Home Pack
One, Limitless Two and Limitless Three. Starting from just €24 a Interactive packages all the benefits which the service offers for
month, and introducing the SIM only concept to Malta, all these free for the first two months. Customer promotions have also
plans include as a minimum, limitless calls to all GO mobile and enabled us to thank and reward some of our Premium Sports
fixed lines, 1GB of data, and free calls and SMS to other networks. customers with the thrilling experience of watching live Premier
League and Serie A matches and enjoying a fantastic holiday in
Over the past year there has also been considerable investment The Seychelles. All of this, together with many other initiatives,
in cross training our Call Centre staff on both Customer Care have all contributed to another successful year in which GO
and Tech Support. This means that customers who contact us continued to grow customer numbers and market share, with
with any queries and more likely to have their concerns dealt with more than 500,000 customer connections across our
product portfolio.

GO ANNUAL REPORT 2015 15

45

1 – 6. Our new outlet at the PAMA 6
shopping village delivers an innovative
retailing concept, including an intelligent
queuing system, and provides customers
with the opportunity to try out the latest
smart phones and tablets.

The end of 2015 also saw the opening of GO’s new concept Another high profile success was the agreement signed with
store at the PAMA shopping village. Apart from a new modern Bank of Valletta to provide the bank with a nationwide dedicated
design, the outlet delivers a brand new retail concept, including Gigabit fibre network, which will future proof its communications
an innovative intelligent queuing system, allowing customers to infrastructure, enabling it to deliver more interactive services to
comfortably wait to be served whilst trying out the latest smart its customers. GO’s reputation and relationship with the business
phones and tablets. community, which it also serves through the data, IP, managed
and co-locations services provided successfully by BMIT, was
GO’s success in the consumer segment has been matched by further strengthened through its support for a number of high
a positive year in the business segment, where we also continue profile events including the Malta iGaming Seminar and EY’s
to innovate and provide value across all our products which ‘Malta – Open For Business’ Conference.
are tailored to meet the needs of small, medium and large
businesses operating in, and from, Malta. A notable success 2015 has, once again, proved to be an exciting year for GO.
in 2015 was our selection as the telecoms provider for the We continue to evolve and successfully promote our existing
Valletta Summit and Commonwealth Heads of Government product portfolio while at the same time innovating to meet the
Meeting, both of which were held towards the end of the year. ever growing expectations of customers. Simultaneously, we
These two global events required a world-class communications are making the necessary investments to secure a viable and
infrastructure to support the needs of both the political successful future.
delegations attending and the international media, across
multiple venues.

16 FIBRE-TO-THE-HOME

GO ANNUAL REPORT 2015 17

INVESTING

€50M
IN FIBRE-TO-THE-HOME

In April 2015, GO launched Fibre-To-The-Home (FTTH)
bringing the next generation of Internet services to Malta.
The five year €50 million roll out of fibre will deliver vastly
improved speeds and data capacity, enabling a number
of new exciting possibilities in areas such as Ultra High
Definition TV, cloud services and high-end gaming. By
December 2015, over 27,000 homes have already been
passed across various localities including Sliema, St Julian’s,
Ta’ Xbiex, Pietà, Msida, Attard, and Mtarfa.

18 GO IN THE COMMUNITY

GO IN THE 3
COMMUNITY

1

2

1, 3, and 7. The GO Cares Employee Fund, fund raising activities, including the
to which GO staff contribute both from annual Citrus Festival and l-Istrina.
their salaries and time, organises various
events throughout the year. Among 4, 5 and 6. Throughout 2015, GO
these, in 2015, the Fund organised a visit continued to provide significant
to the National Aquarium for children technical and financial support to
from St Teresa Home in Żurrieq, St the Malta Community Chest Fund
Joseph Home in Żabbar and St Joseph (MCCF) which remains Malta’s primary
Home in Santa Venera (7), and a day charitable organisation. This included
of activities for the elderly residents supplying the entire communications
at Roseville home in Attard (1 and 3). infrastructure for l-Istrina.

2. Her Excellency Marie Louise Coleiro 8. A group of employees, led by
Preca, President of Malta, paid an Senior HR Manager Josephine
official visit to GO p.l.c. in May 2015. Grima, representing the GO Cares
GO is a principal supporter of the Malta Employee Fund presented a donation
Community Chest Fund providing of €5,000 to Dar tal-Providenza,
communications services and financial during the home’s annual New Year’s
support to many of the organisation’s Day fund raising marathon.

As Malta’s leading provider of communications services, GO GO’s corporate support for the Community is backed up by the
plays a key strategic role in the country’s economy. Our more passionate commitment of many of our employees. Through
than 500,000 customer connections mean that we have a the GO Cares Fund employees donate part of their salaries,
relationship with practically every household and business in donations which are matched by the Company towards good
Malta. This fact places on GO, not only a responsibility to deliver causes. In the past year, this initiative has supported animal
the best possible products and services, but also to support the charities, children’s homes, and homes for the elderly. The focus
Community more broadly. has not only been on Malta but also further afield with funds
raised helping Caritas to build new playgrounds for children
Throughout 2015, GO continued to support the work of the whose homes and lives were shattered by the Nepal earthquake.
Malta Community Chest Fund (MCCF) which remains Malta’s
primary charitable organisation, helping thousands of people in This joint effort between GO and its employees is not just about
need every year. GO’s ongoing support for MCCF has been both raising money. It’s also about giving time. Throughout the year,
technical, providing services and infrastructure, and financial. employees give thousands of hours to support the causes they
From January’s Citrus Festival at San Anton Palace through to are passionate about, with GO’s full support. This includes more
December’s record breaking l-Istrina at the Cottonera Sports than 400 hours of work which are required every Christmas to
Complex, GO has been an enabler and supporter of the Fund’s set up the communications infrastructure for l-Istrina.
work, playing its part in helping those in need.

GO ANNUAL REPORT 2015 19

HELPING THOSE IN NEED
WILL CONTINUE TO BE ONE
OF GO’S PRIORITIES IN 2016.

47

8
56

Helping those in need will continue to be one of GO’s priorities in In 2015, GO also made significant contributions to numerous
2016, during which time we will also be increasing our focus on events which provided the business community with both
children, particularly literacy. This, however, is by no means the valuable insights and networking opportunities. As the drivers of
full extent of GO’s contribution to the Community. Our support progress, entrepreneurs and business leaders need access to the
for sports and cultural activity will also continue. A highlight of right information and contacts to help their business grow. Events
2015 was GO’s sponsorship of the Joseph Calleja Concert which such as the EY Conference, which also includes the publication
also featured Anastacia and provided a unique opportunity for of the results of EY’s annual Malta Attractiveness Survey, and the
a number of up and coming Maltese performers to showcase Malta iGaming Seminar, are among those which deliver on this
their talents to a much wider audience. On the sporting front, front and which GO has supported.
GO also focused on helping Maltese talent to compete and shine
alongside their international peers, such as in the RC44 Valletta Looking forward, GO will remain an active participant in Malta’s
Cup sailing competition. economic, social, and cultural life, committed as it is to delivering
a better future for all.

20 4G NETWORK

GO ANNUAL REPORT 2015 21

ONLYMALTA’S
FULLY FIBRE CONNECTED
4G NETWORK

In December 2015, GO launched Malta’s only fully fibre
connected 4G network, which delivers unrivalled superfast
and reliable mobile Internet. This means that GO is now
able to offer customers a unique experience both in terms
of speed and reliability. The fact that the network is fully
fibre connected means it is much more resilient and can
scale up seamlessly as demand increases.

22 BOARD OF DIRECTORS

BOARD OF DIRECTORS

DEEPAK PADMANABHAN SAVIOUR BALDACCHINO PAUL FENECH
CHAIRMAN
An engineer by profession, and currently Owner and founder of Classic Group
An Honours Engineering graduate in serving on a number of public boards, he Limited, where he is Executive Chairman.
Electronics, with a Post Graduate Diploma in has occupied various managerial posts. He is also the president of the Republic
Computer Communications and Networks, Was involved in a number of key projects Street Business Community and active
has over twenty two years of industry such as the first satellite earth station, member of the Valletta Business
experience in telecommunications, including information technology implementation and Community Committee as well as
work on mergers and acquisitions, strategy formed part of the business development Vice President, and founder, of the
and investments and value creation. advisory team at Maltacom. Valletta Alive Foundation.

JAMES KINSELLA NIKHIL PATIL NORBERT PRIHODA

Graduated in arts from Haverford College, Director of Strategy and Investments at Occupies a senior position with responsibility
Philadelphia, USA. Started his career in the Emirates International Telecommunications for EITL’s Portfolio Group, focusing on creating
field of international journalism and moved and member of the Executive Committee at shareholder value, from transformation,
rapidly to occupy senior management GO and Board Member at BMIT. Completed restructuring and managing risk, as well as
positions within several media companies. his bachelor’s in Mechanical Engineering from facilitating execution of improved operational
Authored an award winning book on media the University of Mumbai, holds a Masters in strategies focused on topline growth. Graduated
and contributed to several other publications. Industrial Engineering from Georgia Institute of in International Business Management and
Technology and an MBA from IMD, Switzerland. concluded his PhD studies in 2005.

THE NOBLE PAUL TESTAFERRATA BRIGITTE ZAMMIT FRANCIS GALEA SALOMONE
MORONI VIANI COMPANY SECRETARY
General Counsel and Head of Legal and
A Director of Aquasun Services Limited, with Regulatory Affairs for Emirates International Holds a bachelors degree in International
responsibility for market research, contracting Telecommunications (EIT). An alumni of Business and a Masters degree in European
with tour operators, administration and property. IMD, Switzerland and the Said Business Studies from the University of Kent
Also a Director of Moroni Investments, Circles School, Oxford, UK. Holds a Doctor of Laws (Canterbury), also read law at the University
Limited, Euro Appliances Company Limited, from the University of Malta and a Master of of Malta. Acts for a number of local and
MACAPPS Limited, Spinola Hotels Limited and Laws in Computer and Telecommunications international clients in the banking, insurance
St George’s Park Company Limited. Law from the University of London. In 2010 and financial services sectors and lectures at
she co-authored a book on cross-border the Institute of Financial Services Providers.
gambling law and policy. Board member of various companies.

GO ANNUAL REPORT 2015 23

DIRECTORS’ REPORT

The Directors are pleased to present their report together with At the core of GO’s business model is a determination to strive
the financial statements of the Company for the year ended on to satisfy the needs of customers and a commitment to deliver
31 December 2015. a customer experience that is second to none. For this reason
GO continues to invest heavily in both innovation and customer
PRINCIPAL ACTIVITIES experience. In order to better pursue a holistic approach to
The Group is Malta’s leading integrated telecommunications consumers’ telecommunication needs, during the year under
services provider and its high speed networks form the backbone review the Group merged its mobile business into GO p.l.c.,
of the island’s modern communications infrastructure. The strengthening GO’s operations and providing better focus on
services provided by the Group include fixed-line and mobile giving customers access to secure and always-available networks
telephony, data and TV services for consumers and business that will enable them to enjoy service offerings seamlessly over
clients. The Group also provides business clients with data wired and wireless networks. This strategy is delivering good
centre facilities and ICT solutions. results as can be confirmed from an analysis of the financial
performance for the financial year ended 31 December 2015.
Insofar as their electronic communications operations are
concerned, the Company and certain of its subsidiary and The Group is reporting an operating profit of €27.8 million, an
associated companies are regulated by and are subject to the increase of 27.9% over the prior year result of €21.8 million. This
provisions of the Electronic Communications (Regulation) Act, result was achieved from a combination of increased revenue
2004 and regulations issued thereunder. and reduction in costs. Both years include items considered
to be of unusual nature, size or incidence relating to voluntary
BUSINESS REVIEW retirement costs and provision for pensions. Normalised EBITDA
A review of the business of the Group during the year under increased by 7.3% to €52.8 million from €49.2 million in 2014.
review, events which took place since the end of the accounting  
period and an indication of likely future developments are given The Group achieved positive results in revenue generation.
in the Chief Executive Officer’s Review on page 7 of the At €123.7 million revenue is 1.2% ahead of the comparative year
Annual Report. as the Group managed to grow revenue from retail activities,
which growth made up for the decline in income from wholesale
REVIEW OF FINANCIAL PERFORMANCE activities, a direct consequence of regulatory intervention.
2015 has been a positive year for GO as the Group is reaping the Whilst retail revenue from legacy fixed voice service continued
benefits of the strategy it embarked upon a few years back. to decline, GO experienced growth in all other retail sectors,
particularly mobile and cloud-based services. Attractive bundling
During the year GO completed the spin-off of its property arm, propositions continue to drive the strong performance at the
Malta Properties Company p.l.c. (formerly known as Malta retail level whilst business is positively reacting to innovative
Properties Company Limited), which as of last November is cloud based services.
quoted separately on the Malta Stock Exchange. It is encouraging
to see the achievement of a major milestone following the Cost of sales, administrative and related costs, excluding items
development and implementation over a number of years of of unusual nature, size or incidence, amounted to €96.3 million
a strategy aimed at delivering value to shareholders from the (2014: €99.1 million). The overall reduction of €2.8 million (2.8%)
Group’s extensive property portfolio. As a result of the spin-off is the result of continued group-wide effort to drive down costs
shareholders enjoyed a net dividend of €0.3313, the highest in without compromising on customer experience.
the Company’s history.
During the year the company was compelled to reclassify
Back to the Group’s core business, competition in the its investment in Forthnet from ‘non-current asset classified
telecommunications sector remains intense, whilst consumer as held for sale’ to ‘investment in associate’. This change in
behaviour remains in a state of transition, driven by the growing classification is mandatory because accounting standards clearly
convergence of telecommunications, information technology, stipulate that any process to sell an asset classified as held for
media and entertainment as people access the Internet sale must be completed within twelve months. As the political
from anywhere and at any time using a multitude of devices. and macroeconomic situation in Greece remains challenging it
Domestic operators not only compete against each other but was not possible to pursue the sale option and the investment
have to contend with competing services which are available is therefore being reclassified. Reclassification triggers equity
free of charge through applications over the Internet provided accounting which implied that the remaining investment in
by organisations with a global reach. Innovation and a positive Forthnet, amounting to €6.6 million, had to be completely written
customer experience are crucial to succeed in such down to a value of nil as a prior year adjustment.
an environment.

24 DIRECTORS’ REPORT

DIRECTORS’ REPORT

CONTINUED

REVIEW OF FINANCIAL PERFORMANCE CONTINUED customers adopting bundles of services across fixed, broadband,
On a positive note, the investment in Cablenet is progressing TV and mobile. The loyalty shown by customers in GO’s
in line with expectations, whilst the Cypriot economy is also product portfolio continues to deliver robust levels of revenues,
showing positive signs of recovery. This implied an upside of profitability and cash generation from core operations. Within this
€7 million in the value of GO’s options to convert its loan to highly competitive environment these results continue to augur
Cablenet into equity and to further acquire majority control of the well for GO to retain a strong presence in the local market across
company. GO exercised these options in January 2016. all product lines and to remain the leading telecommunications
services provider and operator of choice, offering the most
As a result of the reclassification of the investment in Forthnet, extensive product range.
the prior year profit before tax has been restated to €13.7 million,
whilst the increase in value of GO’s options to invest further in FINANCIAL POSITION
Cablenet helped achieve a profit before tax for the year ended Following another year of robust operating performance,
31 December 2015 of €34.2 million. The earnings per share shareholders’ funds as at year end amounted to €92.1 million
amounted to €0.261 as against €0.079 as restated for 2014. in spite of a dividend distribution of €7.1 million in May and a
further distribution of €33.6 million as part of the spin-off
Cash generated from operations amounted to €36.8 million, process. The Group’s net asset value per share stands at €0.91,
a decrease of €3.6 million over 2014, mainly as a direct whilst the Group’s equity position stands at 1.95x the Group’s net
consequence of the spin-off process and the balances between debt position.
GO and Malta Properties Company p.l.c.. In 2015 the Group’s
investments amounted to a cash outflow of €33.4 million, of The Group’s total asset base stands at €207.6 million, a reduction
which €7.5 million represent additional investment in Cablenet. of €9.7 million over the prior year. The main differences over
Investments in property, plant, equipment and intangible assets last year are directly related to the spin-off process which saw
amounted to €25.9 million, €5.8 million more than the value a reduction in land and buildings (and investment property) of
invested in 2014, as the Group maintains an intensive investment €51 million and the creation of a loan receivable from Malta
programme through which it is upgrading its various networks Properties Company p.l.c. of €16 million. The Group’s total asset
and launching new technologies which enable the provision base is 44.4% funded through equity (2014: 47.6%).
of improved services and innovative products. This year GO
launched its 4G network whilst it also maintained momentum in In September 2014 GO concluded the acquisition of 25%
the continued rollout of its Fibre-to-the-Home (FTTH) network. shareholding in Cablenet Communication Systems Limited, a
The rollout of the 4G network will be complete during the first cable company incorporated and operating in Cyprus, in return
half of 2016, whilst the investments in FTTH will be maintained for a loan of €12 million which GO extended to Cablenet by
in the coming years. Through these investments GO will ensure December 2015. This loan is interest free up to 31 December
that its customers continue to enjoy the best possible fixed-line 2017 and during this period GO enjoys the option to convert
and mobile broadband experience. this loan into equity, part of a path that can see GO owning
51% of the share capital of Cablenet. As Cablenet continues to
During 2015 GO reduced its borrowings by €9.6 million as it did perform well and the Cypriot economy continues to show signs
not contract any new facilities and paid dividends amounting to of recovery, the net value of these options increased from €0.3
€7.1 million. Whilst the Group’s cash and cash equivalents were million as at December 2014 to €7.3 million as at December
reduced from a positive €11.6 million as at December 2014 to 2015. GO exercised these options in January 2016.
a negative €3.6 million as at December 2015, GO has a loan
of €16 million receivable from Malta Properties Company p.l.c., The Group’s current assets amounted to €44.8 million (2014:
which loan will be repaid latest in 2017, whilst GO also enjoys €50.3 million) and are mainly represented by receivables of
adequate facilities in place to maintain its investment programme. €31.4 million (2014: €30.3 million), inventories of €9.7 million
(2014: €7.5 million) and cash of €2.7 million (2014: €12.5
GO’s business model is delivering results as GO continues to million). The increase in inventory is temporary and directly
service in excess of 500,000 customer connections, making related to ongoing investments, whilst the reduction in liquidity
it the largest customer base of any operator on the islands. is directly related to GO’s investment programme, which was
GO also continues to enjoy year-on-year growth in customer funded entirely from internally generated resources as a result of
connections as growth in broadband, TV and mobile more than a healthy liquidity position at the beginning of the year and robust
compensate for the decline in traditional fixed voice connections. operational performance.
Equally encouraging is the annual growth in the number of

GO ANNUAL REPORT 2015 25

DIRECTORS’ REPORT CONTINUED In terms of Article 58.2 of the Articles of Association, the term
FINANCIAL POSITION CONTINUED of appointment of the Directors still in office expires at the
Total liabilities increased from €113.8 million (restated) as at forthcoming Annual General Meeting.
December 2014 to €115.5 million as at December 2015. There
is also a shift from non-current liabilities to current liabilities as The Noble P. Testaferrata Moroni Viani, Mr S. Baldacchino
non-current liabilities decreased from €58.9 million to €50.5 and Mr P. Fenech offered themselves for election at the
million, whilst current liabilities increased from €55 million to Seventeenth Annual General Meeting for the three seats on
€64 million. However, both the shift to current liabilities as well the Board of Directors, and were elected to represent the
as the increase in total liabilities is deemed to be temporary and Company’s shareholders.
directly related to the current investment programme which
peaked during the year under review, mainly as a result of the Of the Directors of the Company, Mr D. Padmanabhan and the
investment in 4G. Noble P. Testaferrata Moroni Viani (together with Mr Y. Michaelides
– Chief Executive Officer) were acting as Directors of Innovate
Continued strong operational performance, funding Software Limited.
arrangements in place and the scheduled repayment of the loan
of €16 million by Malta Properties Company p.l.c. will continue to Mr D. Padmanabhan (together with Mr Y. Michaelides
allow the Group to fund its investments in technology, honour its – Chief Executive Officer) were acting as Directors
obligations with its bankers and pursue new investment initiatives of GO Data Centre Services Limited.
aimed at increasing shareholder value. 
Mr D. Padmanabhan (together with Mr Y. Michaelides
The Directors recommend that at the forthcoming Annual – Chief Executive Officer) were also acting as
General Meeting, the shareholders approve the payment of a net Directors of Forthnet S.A. at 31 December 2015.
dividend of €0.10 per share (after taxation) – such dividend to be
payable on 13 May 2016. Total distributions relating to this year’s Mr N. Patil and Mr N. Prihoda (together with Mr Y. Michaelides
operations amount to €0.10 per share. – Chief Executive Officer and Mr J. Attard – Chief Technical
Officer) were acting as Directors of the following subsidiary
The amount of €10,131,049 has been transferred to the dividend companies at 31 December 2015: BMIT Limited, Bellnet Limited
payment reserve. and BM Support Services Limited.

Retained profits carried forward at the balance sheet date Mr N. Patil (together with Mr Y. Michaelides – Chief Executive
amounted to €33.6 million (2014: €28.8 million as restated) for Officer and Mr E. Brincat – Chief Finance Officer) were acting
the Group and €38.7 million (2014: €59.2 million as restated) for as Directors of Cablenet Communications Systems Limited at
the Company. 31 December 2015.

BOARD OF DIRECTORS None of the Directors have service contracts with either the
The Directors who served on the Board during the year under Company or its subsidiaries.
review or up to the date of this report are listed hereunder. None
of the Directors in office during the year or at the balance sheet REMUNERATION COMMITTEE AND
date held an executive appointment with the Company or CORPORATE GOVERNANCE
its subsidiaries. The activities of the remuneration committee and the Group’s
arrangements for corporate governance are reported on
Mr Deepak Padmanabhan (Chairman) pages 28 to 35.
Mr James Kinsella
Mr Nikhil Patil DIRECTORS’ RESPONSIBILITIES
Mr Norbert Prihoda The Directors are required by the Companies Act (Cap 386 of
Mr Paul Fenech the Laws of Malta) to prepare financial statements in accordance
The Noble Paul Testaferrata Moroni Viani with International Financial Reporting Standards as adopted by
Mr Saviour Baldacchino the EU which give a true and fair view of the state of affairs of the
Ms Brigitte Zammit (appointed 30 September 2015) Company as at the end of each reporting period and of the profit
Mr Yasser Zeineldin (resigned 30 September 2015) and loss for that period.

26 DIRECTORS’ REPORT

DIRECTORS’ REPORT

CONTINUED

DIRECTORS’ RESPONSIBILITIES CONTINUED hundred and eighty eight (101,310,488) ordinary shares of fifty
In preparing the financial statements, the Directors are eight point two three four three euro cents (€0.582343) each
responsible for: share, which have been subscribed for and allotted fully paid up.

• Selecting and applying consistently suitable accounting policies; The issued shares of the Company consist of one class of
• Making accounting judgments and estimates that are ordinary shares with equal voting rights attached.

reasonable; and The Company did not modify in any way the structure of its share
• Ensuring that the financial statements are prepared on the capital during the year. No further issues were made and neither
did the Company acquire ownership of or any rights over any
going concern basis unless it is inappropriate to presume that portion of its issued share capital.
the Company will continue in business as a going concern.
The Directors confirm that as at 31 December 2015, only
The Directors are also responsible for designing, implementing Emirates International Telecommunications (Malta) Limited held
and maintaining such internal control as they deem necessary a shareholding in excess of 5% of the total issued share capital.
for the preparation of financial statements that are free from
financial misstatements, whether due to fraud or error. Any shareholder holding in excess of 40% of the issued share
capital of the Company having voting rights may appoint the
INFORMATION PROVIDED IN ACCORDANCE WITH Chairman. In the event that there is no one single shareholder
LISTING RULE 5.70.1 having such a shareholding, the Chairman shall be elected by
There were no material contracts to which the Company, or shareholders at the Annual General Meeting of the Company.
any of its subsidiaries was a party, and in which anyone of the
Company’s Directors was directly or indirectly interested. The rules governing the appointment of Board members
are contained in Clause 55.3 of the Company’s Articles of
GOING CONCERN Association as follows:
The Directors, as required by the Listing Rule 5.62, have
considered the Company’s operating performance, the balance The Directors shall be appointed as set out hereunder:
sheet at year end, as well as the business plan for the coming
year, and they have a reasonable expectation that the Group (a) A Shareholder holding not less than 12% (twelve per cent)
has adequate resources to continue in operational existence for of the issued share capital of the Company having voting
the foreseeable future. For this reason, in preparing the financial rights shall be entitled to appoint one Director for every such
statements, they continue to adopt the going concern basis in 12% holding by letter addressed to the Company. Provided
preparing the financial statements. that anyone Shareholder who, pursuant to the provisions of
sub article 55.1 (a) is entitled to appoint the Chairman, shall
AUDITORS for the purposes of the appointment of Directors in terms of
The auditors, PricewaterhouseCoopers, have expressed their this sub-article have 12% of his holdings deducted and may
willingness to continue in office. accordingly only appoint Directors with the residual balance
of shares having voting rights after such deduction.
A resolution to re-appoint the auditors and to authorise the
Directors to fix their remuneration will be proposed at the (b) Any Shareholder who does not qualify to appoint Directors,
forthcoming Annual General Meeting. in terms of the provisions of paragraph (a) of this sub-article
55.3, and who has not aggregated his holdings with those
INFORMATION PROVIDED IN ACCORDANCE WITH of other Shareholders for the purposes of appointing a
LISTING RULE 5.64 Director(s) pursuant thereto, shall be entitled to participate
The authorised share capital of the Company is three hundred and vote in an election of Directors to take place once in
forty nine million four hundred and five thousand eight every year at the Annual General Meeting of the Company.
hundred euro (€349,405,800) divided into six hundred million
(600,000,000) shares of fifty eight point two three four three
euro cents (€0.582343) each share.

The issued share capital of the Company is fifty eight million nine
hundred and ninety seven thousand, four hundred and fifty three
euro and fifty one euro cents (€58,997,453.51) divided into one
hundred and one million three hundred and ten thousand four

GO ANNUAL REPORT 2015 27

DIRECTORS’ REPORT CONTINUED Board of Directors may from time to time determine, as provided
INFORMATION PROVIDED IN ACCORDANCE WITH for in Clauses 3.2 and 3.3 of the Articles of Association, as long
LISTING RULE 5.64 CONTINUED as any such issue of Equity Securities falls within the authorised
(c) Shareholders entitled to appoint Directors pursuant to the share capital of the Company.

provisions of paragraph (a) sub-article 55.3 shall not be The Company may, subject to the applicable restrictions,
entitled to participate in the election of Directors in terms limitations and conditions contained in the Companies Act,
of paragraph (b) of this sub-article. acquire its own shares and/or Equity Securities.

(d) Members shall be entitled in lieu of voting at an election of The Company confirms that only one chief officer has an
Directors, to aggregate their shareholdings, and to appoint indefinite contract that includes a severance payment clause.
one Director for every twelve per cent (12%) shareholding
having voting rights held between them, by letter addressed Pursuant to Listing Rules 5.64.2, 5.64.4, 5.64.5, 5.64.6, 5.64.7 and
to the Company in accordance with the provisions of sub- 5.64.10 it is hereby declared that, as at 31 December 2015, none
article 55.3 (a); and for the purposes of this paragraph and of the requirements apply to the Company.
voting rights of persons entitled to vote pursuant to the
provisions of sub-article 55.3 (b) remaining after the exercise We, the undersigned, declare that to the best of our knowledge,
of such vote may aggregate such rights as aforesaid. the financial statements prepared in accordance with the
applicable accounting standards, give a true and fair view of
Any amendment to the Company’s Memorandum and Articles the assets, liabilities, financial position and profit or loss of the
of Association has to be made in accordance with the Company and its subsidiaries included in the consolidation
Companies Act. taken as a whole, and that this report includes a fair review of the
performance of the business and the position of the Company
Without prejudice to any special rights previously conferred and its subsidiaries included in the consolidation taken as a
on the holders of any of the existing shares or class thereof, whole, together with a description of the principal risks and
any share in the Company may be issued with such preferred, uncertainties that they face.
deferred, or other special rights or such restrictions, whether in
regard to dividend, voting, return of capital or otherwise as the

Approved by the Board of Directors on the 11 February 2016 and signed on its behalf by:

Mr Deepak Padmanabhan Mr Nikhil Patil
Chairman Director

Registered office
GO
Fra Diegu Street
Marsa
Malta

11 February 2016

28 CORPORATE GOVERNANCE – STATEMENT OF COMPLIANCE

CORPORATE GOVERNANCE
– STATEMENT OF COMPLIANCE

A. INTRODUCTION The Board delegates specific responsibilities to a number of
Pursuant to the Malta Financial Services Authority Listing Rules, committees, notably the Remuneration Committee, the Audit
GO p.l.c. (‘the Company’) whose equity securities are listed Committee and the Executive Committee, each of which
on a regulated market should endeavour to adopt the Code operates under formal terms of reference approved by the Board.
of Principles of Good Corporate Governance (‘the Code’) as
contained in Appendix 5.1 to Chapter 5 of the Listing Rules. In Further detail in relation to the Committees and the
terms of the Listing Rules the Company is hereby reporting on responsibilities of the Board is found in paragraph ‘Principles 4
the extent of its adoption of the Code. and 5’ of this statement.

The Company acknowledges that the Code does not prescribe Principle 2: Chairman and Chief Executive Officer
mandatory rules but recommends principles so as to provide The roles of Chairman and Chief Executive Officer are filled by
proper incentives for the Board of Directors (‘the Board’) and the separate individuals, and the Chief Executive Officer is appointed
Company’s management to pursue objectives that are in the by the Board for a definite period of time. During the period
interests of the Company and its shareholders. Good corporate under review Mr Y. Michaelides continued in his office as Chief
governance is the responsibility of the Board, and in this regard Executive Officer.
the Board has carried out a review of the Company’s compliance
with the Code during the period under review, and hereby The responsibilities and roles of the Chairman and the Chief
provides its report thereon. Executive Officer are clearly established and agreed to by the
Board of Directors.
As demonstrated by the information set out in this statement,
together with the information contained in the Report of the The Chairman is responsible to lead the Board and set its
Remuneration Committee to the Shareholders, the Company agenda. The Chairman ensures that the Board is in receipt of
believes that it has, save as indicated herein the section entitled precise, timely and objective information and also encourages
Non-Compliance with the Code, throughout the period under active engagement by all members of the Board for discussion
review, applied the principles and complied with the provisions of complex and contentious issues.
of the Code.
The Chairman also leads the Executive Committee, the
B. COMPLIANCE composition of which is set out below, and whose main role and
Principle 1: The Board responsibilities are to execute agreed strategy and manage the
The Board, the members of which are appointed by the business. His role in this respect does not render his directorship
shareholders, is primarily tasked with the administration of an executive role.
the Company’s resources in such a way as to enhance the
prosperity of the business over time, and therefore the value of Principle 3: Composition of the Board
the shareholders’ investment. The Board is composed of eight In accordance with the provisions of the Company’s Articles
Directors (one of whom is the Chairman) all of whom are non- of Association, the appointment of Directors to the Board is
executive Directors. exclusively reserved to the Company’s shareholders, except in so
far as appointment is made to fill a casual vacancy on the Board,
The Board is in regular contact with the Chief Executive Officer and which appointment would expire at the Company’s Annual
and is continuously informed of any decisions taken by the General Meeting following appointment. Any vacancy among the
Executive Committee in order to ensure an effective contribution Directors may be filled by the co-option of another person to fill
to the decision making process, whilst at the same time such vacancy. Such co-option shall be made by the Board
exercising prudent and effective controls. Directors, individually of Directors.
and collectively, are of appropriate calibre, with the necessary
skill and experience to assist them in providing leadership, The Board has the overall responsibility for the activities carried
integrity and judgement in directing the Company towards the out within the Company and the Group and thus decides on the
maximisation of shareholder value. nature, direction, strategy and framework of the activities and sets
the objectives for the activities.

GO ANNUAL REPORT 2015 29

CORPORATE GOVERNANCE The Board has the responsibility to ensure that the activities are
– STATEMENT OF COMPLIANCE CONTINUED organised in such a way that the accounts, management of funds
B. COMPLIANCE CONTINUED and financial conditions in all other respects are controlled in a
Principle 3: Composition of the Board CONTINUED satisfactory manner and that the risks inherent in the activities
The Board of Directors is currently chaired by Mr D. Padmanabhan are identified, defined, measured, monitored and controlled in
and comprises eight (8) non-executive Directors. The following accordance with external and internal rules, including the Articles
Directors served on the Board during the period under review: of Association of the Company. The Board of Directors, through
the work carried out by the Executive Committee, continuously
Mr Deepak Padmanabhan (Chairman) assesses and monitors the Company’s operational and financial
Mr James Kinsella performance, assesses and controls risk, and monitors competitive
Mr Norbert Prihoda forces in all areas of operation. It also ensures that both the
Mr Nikhil Patil Company and its employees maintain the highest standards of
Mr Paul Fenech corporate conduct.
The Noble Paul Testaferrata Moroni Viani
Mr Saviour Baldacchino Board Committees
Ms Brigitte Zammit (appointed 30 September 2015) Audit Committee
Mr Yasser Zeineldin (resigned 30 September 2015) The Audit Committee supports the work of the Board in terms
of quality control of the Group’s financial reports and internal
For the purposes of the Code, the non-executive Directors controls. The Audit Committee is currently chaired by Mr N. Patil,
are independent. The Company deems that, although Mr D. with the other members being Ms B. Zammit and the Noble P.
Padmanabhan has an employee and director relationship with Testaferrata Moroni Viani. The Audit Committee is independent
the controlling shareholder, in terms of Supporting Principle 3(vii) and is constituted in accordance with the requirements of the
of the Code of Principles of Good Corporate Governance such Listing Rules, with the Noble P. Testaferrata Moroni Viani being
relationship is not considered to create a conflict of interest such chosen as the member competent in accounting and/or auditing
as to jeopardise exercise of his free judgment. in view of his experience in the field. The Internal Auditor is
present at Audit Committee meetings. The Chief Finance Officer
Principles 4 and 5: and the external auditors of the Company attend the meetings
The Responsibilities of the Board and Board Meetings of the Committee by invitation. Other executives are requested
The Board has a formal schedule of matters reserved to it for to attend when required. The Company Secretary also acts as
decisions, but also delegates specific responsibilities to various Secretary to the Audit Committee.
board committees and sub-committees, the most prominent
being the Audit Committee, the Remuneration Committee and The Committee scrutinises and monitors related party
the Executive Committee. Directors receive board and committee transactions. It considers the materiality and the nature of the
papers in advance of meetings and have access to the advice and related party transactions carried out by the Company to ensure
services of the Company Secretary. Directors may, in the course that the arm’s length principle is adhered to at all times.
of their duties, take independent professional advice on any
matter at the Company’s expense. The Directors are fully aware As part of its duties, the Committee receives and considers
of their responsibility always to act in the best interests of the reports on the system of internal financial controls and the audited
Company and its shareholders as a whole, irrespective of whoever statutory financial statements of all companies comprising the
appointed or elected them to serve on the Board. As delegated Group. The Committee held three (3) meetings during the year.
and monitored by the Board, the Company Secretary keeps The external auditors attended all of these meetings.
detailed records of all dealings by Directors and senior executives
of the Company and its subsidiaries in the Company’s shares and Remuneration Committee
all minutes of meetings of the Board and its sub-committees. The Committee is responsible for determining and agreeing with
the Board the framework or broad policy for the Remuneration
During the year under review the Board met nine (9) times. of the Company’s chief officers, the Chairman of the Company,
the Directors of the Board, and such other members as it is
On joining the Board, a Director is provided with a presentation designated to consider. In determining such policy, the Committee
by the departmental heads on the activities of their respective takes into account all factors which it deems necessary, including
business unit in the Company and its subsidiaries. The Directors the position of the Group companies relative to other companies
receive monthly management accounts on the Group financial in the marketplace.
performance and position.

30 CORPORATE GOVERNANCE – STATEMENT OF COMPLIANCE

CORPORATE GOVERNANCE
– STATEMENT OF COMPLIANCE CONTINUED

B. COMPLIANCE CONTINUED between senior management and Directors, as well as facilitating
Principles 4 and 5: The Responsibilities of the Board professional development. The Company Secretary advises the
and Board Meetings CONTINUED Board through the Chairman on all governance matters.
Remuneration Committee CONTINUED
The objective of such policy shall be to ensure that Directors Directors may, in the course of their duties, take independent
and chief officers are provided with appropriate incentives professional advice on any matter at the Company’s expense.
to encourage enhanced performance and are, in a fair and The Company will provide for additional individual Directors’
responsible manner, rewarded for their individual contributions to training on a requirements basis.
the success of the Group companies. The Group Remuneration
Committee is currently chaired by Mr D. Padmanabhan, the Principle 7: Evaluation of the Board’s Performance
other members being the Noble P. Testaferrata Moroni Viani and The Chairman of the Board informally evaluates the
Mr P. Fenech. The Company Secretary, Dr F. Galea Salomone, performance of the Board members, which assessment is
acts as Secretary to the Remuneration Committee. The Group followed by discussions within the Board. Through this process
Remuneration Committee met three (3) times in 2015. The the activities and working methods of the Board and each
Report of the Committee to the shareholders is set out on committee member are evaluated. Amongst the things examined
pages 34 and 35. by the Chairman through his assessment are the following: how
to improve the work of the Board further, whether or not each
Executive Committee individual member takes an active part in the discussions of the
The day-to-day management of the Company is led by the Board and the committees; whether they contribute independent
Chief Executive Officer and supported by the Board of Directors opinions and whether the meeting atmosphere facilitates open
directly and through the Executive Committee (‘EC’). The EC discussions. Under the present circumstances the Board does
is equipped with the necessary decision-making tools and not consider it necessary to appoint a committee to carry out a
strict Board oversight to facilitate the successful execution of performance evaluation of its role as the Board’s performance is
its duties. The EC provides oversight, guidance and leadership furthermore also under the scrutiny of the shareholders.
for the management of the business within the guidelines and  
approval limits set from time to time by the Board of Directors. On the other hand, the performance of the Chairman is evaluated
It recommends and forwards to the Board of Directors those by the Board of Directors of the ultimate controlling party, taking
decisions that are outside its approval limits. into account the manner in which the Chairman is appointed. The
self-evaluation of the Board has not led to any material changes
The EC is currently chaired by Mr D. Padmanabhan with the other in the Company’s governance structures and organisations.
members being Mr Y. Michaelides, Mr N. Prihoda, Mr E. Brincat
and Mr N. Patil. The Company Secretary acts as secretary to the Principle 8: Committees
EC. The Committee held nine (9) meetings during the year The Remuneration Committee is dealt with under the
under review. Remuneration Report, which also includes the Remuneration
Statement in terms of Code Provisions 8.A.3 and 8.A.4.
Principle 6: Information and Professional Development
The Board is responsible for the appointment of the Chief The Company has opted not to set up a Nomination Committee.
Executive Officer. The Chief Executive Officer, although Further explanation is provided under the section entitled Non-
responsible for the recruitment and selection of senior Compliance with the Code of this Statement.
management, consults with the Remuneration Committee and
with the Board on the appointment of senior management. Principles 9 and 10: Relations with Shareholders and with the
Market, and Institutional Shareholders
On joining the Board, Board members are informed in writing by The Company recognises the importance of maintaining a
the Company Secretary of the Directors’ duties and obligations, dialogue with its shareholders and of keeping the market
relevant legislation as well as rules and bye-laws. In addition, informed to ensure that its strategies and performance are well
Directors have access to the advice and services of the Company understood. During the period under review the Company has
Secretary and the Board is also advised directly, as appropriate, by maintained an effective communication with the market through
its legal advisors. Directors are also provided with a presentation a number of Company announcements and press releases.
by the departmental heads on the activities of their respective
business unit in the Company and subsidiaries. The Directors The Company also communicates with its shareholders through
receive monthly management accounts on the Group’s financial the Company’s Annual General Meeting (‘AGM’). The Chairman
performance and position. The Company Secretary ensures of the Board ensures that all Directors attend the AGM and that
effective information flows within the Board, committees and both the Chairman of the Board and the Chairman of the Audit
Committee are available to answer questions.

GO ANNUAL REPORT 2015 31

CORPORATE GOVERNANCE Mr P. Fenech has a beneficial interest in the Company of 130,995
– STATEMENT OF COMPLIANCE CONTINUED shares through the shareholding of Classic Group Ltd. in GO p.l.c..
B. COMPLIANCE CONTINUED
Principles 9 and 10: Relations with Shareholders and with the As at year-end, Mr S. Baldacchino had a beneficial interest in the
Market, and Institutional Shareholders CONTINUED Company of 10,600 shares.
Both the Chairman and Chief Executive Officer also ensure
that sufficient contact is maintained with major shareholders As at 31 December 2015, The Noble P. Testaferrata Moroni Viani
to understand issues and concerns. Apart from the AGM, the had a beneficial interest in the Company of 75,494 and 2,900
Company communicates with its shareholders by way of the shares through the shareholding of Testaferrata Moroni Viani
Annual Report and Financial Statements and also through (Holdings) Ltd. and Testaferrata Moroni Viani Ltd. respectively
the Company’s website (www.go.com.mt) which also contains in GO p.l.c.. He also had a beneficial interest in Forthnet S.A. of
information about the Company and its business, including an 14,750 shares.
Investor Relations section.
As at 31 December 2015, Mr D. Padmanabhan had a beneficial
In addition, the Company holds meetings with stockbrokers and interest in Forthnet S.A. of 71,536 shares.
financial intermediaries at least twice a year, which meetings
usually coincide with the publication of financial statements. None of the other Directors of the Company have any interest
in the shares of the Company or the Company’s subsidiaries
The office of the Company Secretary maintains regular or investees or any disclosable interest in any contracts or
communication between the Company and its investors. Individual arrangements either subsisting at the end of the last financial
shareholders can raise matters relating to their shareholdings and year or entered into during this financial year.
the business of the Group at any time throughout the year, and are
given the opportunity to ask questions at the AGM or to submit There were no other changes in the Directors’ interest in the
written questions in advance. shareholding of the Company between year-end and
9 February 2016.
As provided by the Companies Act, 1995 minority shareholders
may convene Extraordinary General Meetings. Principle 12: Corporate Social Responsibility
As a major presence in the community, GO has always taken its
Principle 11: Conflicts of Interest corporate social responsibility very seriously and, as in previous
The Directors are fully aware of their responsibility always to act years, in 2015 the Group has maintained a steady programme of
in the best interests of the Company and its shareholders as activities aimed at improving the quality of life of its work force
a whole irrespective of whoever appointed or elected them to and their families, as well as of the local community and society
serve on the Board. at large. L-Istrina was once again an event which was heavily
supported by GO, not only in terms of a substantial donation but
On joining the Board and regularly thereafter, the Directors also in terms of equipment, communications infrastructure and
are informed of their obligations on dealing in securities of the hundreds of man-hours, freely given to ensure the success of this
Company within the parameters of law, including the Listing annual fundraiser. GO also continued to support various NGOs,
Rules, and Directors follow the required notification procedures. particularly animal welfare organisations.

Directors’ interest in the shareholding of the Company: The Company retained a careful eye on environmental
considerations in all its activities, as well as ethical behaviour
Number of shares as with regards to its interactions with all its stakeholders.
at 31 December 2015
It is always particularly encouraging to note that while employee
Mr Deepak Padmanabhan nil support for company-driven events is growing from year to year, so
Mr James Kinsella nil are the number of personal initiatives taken, as this is very much in
Mr Nikhil Patil nil line with the Company’s belief in a holistic approach to their work-
Mr Norbert Prihoda nil life balance as well as strengthening community team spirit.
Ms Brigitte Zammit nil
Mr Paul Fenech 130,995
The Noble Paul Testaferrata Moroni Viani 78,394
Mr Saviour Baldacchino 10,600

32 CORPORATE GOVERNANCE – STATEMENT OF COMPLIANCE

CORPORATE GOVERNANCE
– STATEMENT OF COMPLIANCE CONTINUED

C. NON-COMPLIANCE WITH THE CODE every such 12% holding by letter addressed to the Company.
Principle 3: Executive and Non-Executive Directors on the Board The other shareholders are entitled to appoint the remaining
As explained in Principle 3 in Section B, the Board is composed Board members at the AGM in accordance with the provisions of
entirely of non-executive Directors. Notwithstanding this, it is the Articles of Association. The nomination of a candidate by a
considered that the Board, as composed, provides for sufficiently shareholder is to be seconded by a shareholder or shareholders
balanced skills and experience to enable it to discharge its duties holding at least 15,000 shares.
and responsibilities effectively. In addition, no cases of conflict of
interest are foreseen. Within this context, the Board believes that the setting up of a
Nomination Committee is currently not suited to the Company
Principle 4: Succession Policy for the Board since it will not be able to undertake satisfactorily its full functions
(code provision 4.2.7) and responsibilities as envisaged by the spirit of the Code. The
This Code Provision recommends “the development of a Company also considers that some of the functions of the
succession policy for the future composition of the Board of Nomination Committee (particularly those relating to succession
Directors and particularly the executive component thereof, for planning and the appointment of senior management) are
which the Chairman should hold key responsibility”. already dealt with by the Remuneration Committee.

In the context of the appointment of Directors being a matter Principle 9: Conflicts between Shareholders (code provision 9.3)
reserved exclusively to the Company’s shareholders (except Currently there is no established mechanism disclosed in
where the need arises to fill a casual vacancy) as explained under the Company’s Memorandum and Articles of Association to
Principle 3 in Section B, considering that every Director retires trigger arbitration in the case of conflict between the minority
from office at the AGM and on the basis of the Directors’ non- shareholders and the controlling shareholders. In any such cases
executive role, the Company does not consider it feasible to have should a conflict arise, the matter is dealt with in the appropriate
in place such a succession policy. fora in the Board meetings, wherein the minority shareholders are
represented. There is also an open channel of communication
Principle 6: Succession Plan for Senior Management between the Company and the minority shareholders via the
Although the Chief Executive Officer is responsible for the office of the Company Secretary.
recruitment and appointment of senior management, the
Company has not established a formal succession plan. This D. INTERNAL CONTROLS
is basically due to the fact that the appointment of senior The key features of the Group’s system of internal controls are
management is always discussed at the Remuneration as follows:
Committee and approved by the Board of Directors.
Organisation
Principle 8 B: Nomination Committee The Group operates through boards of Directors of subsidiaries
Pursuant to the Company’s Articles of Association, the with clear reporting lines and delegation of powers. The
appointment of Directors to the Board is reserved exclusively to Company’s Chairman is also the chairman of the board of
the Company’s shareholders. Shareholders holding not less than Directors of the Company’s subsidiaries, except for BMIT Limited,
12% (twelve per cent) of the issued share capital of the Company BM Support Services Limited and Bellnet Limited.
having voting rights shall be entitled to appoint one Director for

GO ANNUAL REPORT 2015 33

CORPORATE GOVERNANCE Monitoring and corrective action
– STATEMENT OF COMPLIANCE CONTINUED There are clear and consistent procedures in place for monitoring
D. INTERNAL CONTROLS CONTINUED the system of internal financial controls. The Audit Committee
Control environment meets regularly during the year and, within its terms of reference
The Group is committed to the highest standards of business as approved by the Listing Authority, reviews the effectiveness of
conduct and seeks to maintain these standards across all of its the Group’s systems of internal financial controls. The committee
operations. Group policies and employee procedures are in place receives reports from management, internal audit and the
for the reporting and resolution of fraudulent activities. external auditors.

The Group has an appropriate organisational structure for E. GENERAL MEETINGS
planning, executing, controlling and monitoring business Shareholders’ influence is exercised at the Annual General
operations in order to achieve Group objectives. Lines of Meeting (AGM), which is the highest decision-making body of
responsibility and delegation of authority are documented. the Company. All shareholders, registered in the Shareholders’
Register, have the right to participate in the Meeting and to vote
The Group and the individual companies comprising it have for the full number of their respective shares. A shareholder who
implemented control procedures designed to ensure complete cannot participate in the Meeting can be represented by proxy.
and accurate accounting for financial transactions and to limit
the potential exposure to loss of assets or fraud. Measures taken Business at the Company’s AGM will cover the Annual Report
include physical controls, segregation of duties and reviews by and Financial Statements, the declaration of dividends,
management, internal audit and the external auditors. election of Directors and the approval of their remuneration,
the appointment of the auditors and the authorisation of the
Risk identification Directors to set the auditors’ fees. Shareholders’ meetings are
Group management is responsible together with each of the called with sufficient notice to enable the use of proxies to attend,
subsidiary companies’ management, for the identification and vote or abstain. The Company clearly recognises the importance
evaluation of key risks applicable to their areas of business. These of maintaining a regular dialogue with its shareholders in order
risks are assessed on a continual basis and may be associated to ensure that its strategies and performance are understood. It
with a variety of internal or external sources including control communicates with the shareholders through the AGM by way of
breakdowns, disruption in information systems, competition, the Annual Report and Financial Statements and by publishing
natural catastrophe and regulatory requirements. its results on a regular basis during the year. This is done through
the Investor Relations Section on the Company’s Internet site, the
Information and communication office of the Company Secretary, and Company announcements
Group companies participate in periodic strategic reviews which to the market in general. A free-phone service is reserved for
include consideration of long-term financial projections and the communication by shareholders with the Company. Regular
evaluation of business alternatives. meetings are held with financial intermediaries and stockbrokers.

34 REMUNERATION COMMITTEE REPORT

REMUNERATION COMMITTEE REPORT

A. TERMS OF REFERENCE AND MEMBERSHIP Mr D. Padmanabhan, Mr N. Patil and Mr N. Prihoda opted to waive
The Committee is responsible for determining and agreeing with off fees due to them as Directors. No variable remuneration is
the Board the framework or broad policy for the Remuneration paid to Directors.
of the Company’s Chief Officers, the Chairman of the Company,
the Directors of the board, and such other members as it is No Board Committee fees were payable to any of the Directors
designated to consider. In determining such policy, the Committee during the year under review.
takes into account all factors which it deems necessary, including
the position of the Group companies relative to other companies None of the Directors have service contracts with either the
in the marketplace. The objective of such policy shall be to ensure Company or its subsidiaries.
that Directors and Chief Officers are provided with appropriate
incentives to encourage enhanced performance and are, in None of the Directors, in their capacity as a Director of the
a fair and responsible manner, rewarded for their individual Company or any of its subsidiaries, is entitled to profit sharing,
contributions to the success of the Group Companies. share options or pension benefits. In terms of non-cash benefits,
Directors are entitled to a number of services offered by the
The Group Remuneration Committee is composed of Company and to health insurance.
Mr D. Padmanabhan (Chairman), The Noble P. Testaferrata
Moroni Viani and Mr P. Fenech, all of whom are non-executive Total emoluments received by Directors during the year under
Directors of the Company. The Chief Executive Officer (CEO) of review are reported below under section E in terms of the
the Company is invited to attend the meetings of the Committee. Code Provisions.
The Company Secretary, Dr F. Galea Salomone acts as Secretary
to the Remuneration Committee. D. REMUNERATION POLICY – SENIOR MANAGEMENT
For the purposes of this Remuneration Statement, references to
B. MEETINGS Senior Management shall mean the Chief Executive Officer and
During the period under review the Committee held two (2) the Chief Officers.
meetings. All Committee members attended both meetings held.
The base salaries of all Senior Management are established in
The Committee discussed the following matters: accordance with the Company’s salary structure. The Group’s
Remuneration Committee is satisfied that in all cases the base
• Remuneration report; remuneration established is in line with the criteria described
• Remuneration of Senior Management; in the introduction to this report. In particular, in reaching this
• Approval of bonus to Senior Management and other staff; conclusion, the Committee has paid due regard to market
• Resignation and appointment of new Chief Officers; conditions and remuneration rates offered by comparable
• Approval of CEO’s performance bonus for 2015; and organisations for comparable roles and to the Group’s
• Bonus scheme for 2016. established performance-related remuneration and
evaluation system.
C. REMUNERATION POLICY – DIRECTORS
The Board is composed exclusively of non-executive Directors. Members of the Senior Management are each entitled to a
The determination of remuneration arrangements for Board cash performance bonus. In addition, the Board of Directors
members is a matter reserved for the Board as a whole. The may approve additional bonuses for outstanding performances
maximum annual aggregate emoluments that may be paid to and achievements. Performance is measured on the basis of
Directors is approved by the shareholders in General Meeting appraisals drawn up or endorsed by the CEO. These bonuses
in terms of the Articles of Association of the Company. The constitute the variable remuneration disclosed in the table below.
aggregate amount approved for this purpose during the last
Annual General Meeting was €200,000. The rate at which the bonus is paid depends on the Committee’s
evaluation of the CEO’s assessment of the individual officer’s
The current Directors’ fees as approved by the Board are set at performance. Bonuses are calculated on the basis of personal
€11,647 per annum for Directors and €17,470 per annum for performance, departmental and Company objectives. Total
the Chairman. Since his appointment as Chairman of the Board amounts are subject to the discretion of the Remuneration
of Directors, Mr D. Padmanabhan opted to waive fees due to Committee and the Board of Directors.
him as Chairman. As of 1 January 2013, Board Directors

GO ANNUAL REPORT 2015 35

REMUNERATION COMMITTEE REPORT CONTINUED
D. REMUNERATION POLICY – SENIOR MANAGEMENT CONTINUED
The Company does not have a policy in place which regulates the terms and conditions of contracts of Senior Management with respect
to contract duration, notice periods, termination payments and related matters. The Company confirms that only one chief officer has an
indefinite contract that includes a severance payment clause.

As is the case with Directors, Senior Management are entitled to non-cash benefits in terms of a number of services offered by the
Company and to health insurance. None of the Senior Management are entitled to profit sharing, share options or pension benefits.

Total emoluments received by Senior Management during the year under review are reported below under section E in terms of the
Code Provisions.

E. CODE PROVISIONS 8.A.5
Emoluments of Directors

Fixed Remuneration Variable Remuneration Share Options Others

€55,323 None None €2,438

Emoluments of Senior Management

Fixed Remuneration Variable Remuneration Share Options Others
None €18,590
€1,510,107 €562,001

Mr Deepak Padmanabhan
Chairman, Group Remuneration Committee

11 February 2016

36 INDEPENDENT AUDITOR’S REPORT

INDEPENDENT AUDITOR’S REPORT

To the shareholders of GO p.l.c. An audit involves performing procedures to obtain audit evidence
about the amounts and disclosures in the financial statements.
REPORT ON THE FINANCIAL STATEMENTS FOR THE YEAR The procedures selected depend on the auditor’s judgement,
ENDED 31 DECEMBER 2015 including the assessment of the risks of material misstatement of
the financial statements, whether due to fraud or error. In making
We have audited the consolidated and stand-alone financial those risk assessments, the auditor considers internal control
statements of GO p.l.c. (together the ‘financial statements’) on relevant to the entity’s preparation of financial statements that
pages 39 to 126, which comprise the consolidated and stand- give a true and fair view in order to design audit procedures that
alone statements of financial position as at 31 December 2015, are appropriate in the circumstances, but not for the purpose of
and the statements of income, comprehensive income, changes in expressing an opinion on the effectiveness of the entity’s internal
equity and cash flows for the year then ended, and a summary of control. An audit also includes evaluating the appropriateness of
significant accounting policies and other explanatory information. accounting policies used and the reasonableness of accounting
estimates made by the Directors, as well as evaluating the overall
Directors’ responsibility for the financial statements presentation of the financial statements.
As explained more comprehensively in the Statement of Directors’
responsibilities for the financial statements on pages 25 to 26, We believe that the audit evidence we have obtained is sufficient
the Directors are responsible for the preparation of financial and appropriate to provide a basis for our audit opinion.
statements that give a true and fair view in accordance with
International Financial Reporting Standards (IFRSs) as adopted Opinion
by the EU and the requirements of the Maltese Companies Act, In our opinion the financial statements
1995, and for such internal control as the Directors determine is • give a true and fair view of the financial position of the Group
necessary to enable the preparation of financial statements that
are free from material misstatement, whether due to fraud or error. and the parent Company as at 31 December 2015, and of their
financial performance and their cash flows for the year then
Auditor’s responsibility ended in accordance with IFRSs as adopted by the EU; and
Our responsibility is to express an opinion on these financial • have been properly prepared in accordance with the
statements based on our audit. We conducted our audit in requirements of the Maltese Companies Act, 1995.
accordance with International Standards on Auditing. Those
Standards require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free from
material misstatement.

GO ANNUAL REPORT 2015 37

INDEPENDENT AUDITOR’S REPORT CONTINUED Matters on which we are required to report by exception
To the shareholders of GO p.l.c. We also have responsibilities under:
• the Maltese Companies Act, 1995 to report to you if,
REPORT ON OTHER LEGAL AND REGULATORY
REQUIREMENTS FOR THE YEAR ENDED 31 DECEMBER 2015 in our opinion:
• The information given in the Directors’ report is not
Report on the statement of compliance with the Principles of
Good Corporate Governance consistent with the financial statements.
The Listing Rules issued by the Malta Listing Authority require • Adequate accounting records have not been kept, or that
the Directors to prepare and include in their Annual Report a
Statement of Compliance providing an explanation of the extent returns adequate for our audit have not been received from
to which they have adopted the Code of Principles of Good branches not visited by us.
Corporate Governance and the effective measures that they have • The financial statements are not in agreement with the
taken to ensure compliance throughout the accounting period accounting records and returns.
with those Principles. • We have not received all the information and explanations
we require for our audit.
The Listing Rules also require the auditor to include a report on • Certain disclosures of Directors’ remuneration specified
the Statement of Compliance prepared by the Directors. by law are not made in the financial statements, giving the
required particulars in our report.
We read the Statement of Compliance and consider the • the Listing Rules to review the statement made by the
implications for our report if we become aware of any apparent Directors that the business is a going concern together with
misstatements or material inconsistencies with the financial supporting assumptions or qualifications as necessary.
statements included in the Annual Report. Our responsibilities do
not extend to considering whether this statement is consistent We have nothing to report to you in respect of these
with any other information included in the Annual Report. responsibilities.

We are not required to, and we do not, consider whether the PricewaterhouseCoopers
Board’s statements on internal control included in the Statement 78 Mill Street
of Compliance cover all risks and controls, or form an opinion Qormi
on the effectiveness of the Company’s corporate governance Malta
procedures or its risk and control procedures.

In our opinion, the Statement of Compliance set out on pages
28 to 33 has been properly prepared in accordance with the
requirements of the Listing Rules issued by the Malta
Listing Authority.

Mr Simon Flynn
Partner

11 February 2016

38 FINANCIAL STATEMENTS

FINANCIAL STATEMENTS

GO ANNUAL REPORT 2015 39

STATEMENTS OF FINANCIAL POSITION

2015 Group 2015 2014 Company
€000 €000 €000 As at
2014
As at 31 December Notes €000 Restated 1 January 2014
€000
ASSETS Restated
Non-current assets Restated
Property, plant and equipment
Investment property 5 97,826 133,640 89,933 83,389 85,038
Intangible assets – – –
Investments in subsidiaries 6 – 2,199
Investment in associate 7,462 7,565 12,165
Loans receivable from subsidiaries 7 13,199 13,526 10,566 10,616 10,616
Loans receivable from related party
Loans receivable from associate 8 –– 1,917 1,681 –
Deferred tax assets – 49,524 49,524
Derivative financial instruments 9 1,917 1,681
Trade and other receivables 16,000 – –
11 – – 10,494 3,673 –
Total non-current assets 6,580 6,859
11 16,000 – 4,132 2,383 –
15,955 1,386 1,217
11 10,494 3,673
1,656 166,797 165,419
13 5,769 8,497
158,115
20 15,955 2,383

15 1,656 1,387

162,816 166,986

Current assets 14 9,718 7,468 9,489 7,402 6,861
Inventories 15 31,353 30,311 42,429 38,466 44,208
Trade and other receivables
Current tax assets 16 995 – 995 172 1,013
Cash and cash equivalents 2,696 12,509 1,767 11,293 28,860

Total current assets 44,762 50,288 54,680 57,333 80,942

Non-current assets classified as held for sale 10 – – – 6,592 –
Total assets 212,795 230,722
207,578 217,274 246,361

40 FINANCIAL STATEMENTS

STATEMENTS OF FINANCIAL POSITION

CONTINUED

2015 Group 2015 2014 Company
€000 €000 €000 As at
2014
As at 31 December Notes €000 Restated 1 January 2014
€000
EQUITY AND LIABILITIES Restated
EQUITY Restated
Share capital
Reserves 17 58,998 58,998 58,998 58,998 58,998
Retained earnings 5,626 5,766 5,271
18 (543) 15,640 38,739 59,181
Total equity 50,007
33,642 28,787
LIABILITIES 114,276
Non–current liabilities 92,097 103,425 103,363 123,945
Borrowings
Deferred tax liabilities 19 35,150 44,573 35,150 44,573 59,246
Provisions for pensions 13 611 7,178 334 442 239
Derivative financial instruments 21 4,219 3,667
Trade and other payables 20 8,669 2,049 4,219 3,667 3,370
22 1,838 1,388 8,669 2,049 512
Total non–current liabilities 1,838 1,388
50,487 58,855 3,656
Current liabilities 50,210 52,119
Borrowings 67,023
Provisions for pensions 19 14,678 9,425 14,678 9,425
Derivative financial instruments 21 2,465 2,834 2,465 2,834 13,014
Trade and other payables 20 – 2,651
Current tax liabilities 22 47,633 91 – 91
42,522 42,079 42,308 –
Total current liabilities 218 49,172
122 – –
Total liabilities 64,994 225
54,994 59,222 54,658
Total equity and liabilities 115,481 65,062
113,849 109,432 106,777
207,578 132,085
217,274 212,795 230,722
246,361

The notes on pages 48 to 126 are an integral part of these consolidated financial statements.
The financial statements on pages 39 to 126 were authorised for issue by the Board on 11 February 2016 and were signed on its behalf by:

Mr Deepak Padmanabhan Mr Nikhil Patil
Chairman Director

GO ANNUAL REPORT 2015 41

INCOME STATEMENTS

Year ended 31 December Notes 2015 Group 2015 Company
€000 2014 €000 2014
Revenue 23 €000 €000
Cost of sales 24 123,700 Restated 110,650
24 (70,369) (65,048) Restated
Gross profit 27 122,258
Administrative and other related expenses 28 53,331 (71,890) 45,602 110,658
Other income (27,091) (29,709) (66,120)
Other expenses 24 50,368
1,646 (29,801) 1,522 44,538
Operating profit (51) (47) (32,954)
1,337
Analysed as follows: 27,835 (140) 17,368 1,145
Operating profit before non-recurring items (188)
Non-recurring items presented within 21,764
‘Administrative and other related expenses’ 12,541

Operating profit after non-recurring items 29,006 24,367 18,539 15,144

Finance income 29 (1,171) (2,603) (1,171) (2,603)
Finance costs 30
Gain on spin-off effected by way of distribution 33 27,835 21,764 17,368 12,541
Adjustments arising on fair valuation of property 5, 6
Adjustments arising on fair valuation of derivative 1,059 390 10,444 12,717
20 (1,880) (2,315) (1,880) (2,315)
financial instruments 11
Losses attributable to investment in joint venture 9 – – 1,144 –
Share of results of associate – 491 – 69
31
Profit before tax 6,952 – 6,952 –
Tax expense 32 – (6,592) (6,592) –
–
Profit for the year – attributable to owners of the Company 236 – 236
23,012
Earnings per share (euro cents) 34,202 13,738 27,672 (6,630)
(7,791) (5,704) (7,606)
16,382
26,411 8,034 20,066

26c1 7c9

The notes on pages 48 to 126 are an integral part of these consolidated financial statements.

42 FINANCIAL STATEMENTS

STATEMENTS OF COMPREHENSIVE INCOME

2015 Group 2015 Company
€000 2014 €000 2014
€000 €000
Year ended 31 December Notes Restated
Restated

Comprehensive income 26,411 8,034 20,066 16,382
Profit for the year
5 – 38 – 676
Other comprehensive income 21 (245) (566) (245) (566)
Items that will not be reclassified to profit or loss
Surplus arising on revaluation of land and buildings 13 1,285 – 108 –
Remeasurements of defined benefit obligations 13 – (956) – (203)
13
Income tax relating to components of other 86 198 86 198
comprehensive income: 20
– Net impact of the application of the changed tax regime on 91 421 91 421
13
deferred tax attributable to the fair valuation of property (32) (147) (32) (147)
– Surplus on revaluation of land and buildings 1,185 (1,012) 8 379
– Remeasurements of defined benefit obligations 27,596 7,022 16,761
20,074
Items that may be subsequently reclassified to profit or loss
Change in fair value of derivative designated as hedging

instrument in cash flow hedge

Income tax relating to components of other
comprehensive income

Total other comprehensive income for the year, net of tax

Total comprehensive income for the year

The notes on pages 48 to 126 are an integral part of these consolidated financial statements.

GO ANNUAL REPORT 2015 43

STATEMENTS OF CHANGES IN EQUITY

Share Retained
capital
€000 Reserves earnings Total
€000
Group Notes 58,998 €000 €000
103,495
Balance at 1 January 2014 16,536 27,961

Comprehensive income – – 8,034 8,034
Profit for the year (restated)
5 – 38 – 38
Other comprehensive income:
Surplus arising on revaluation of land and buildings 18 – (956) – (956)
Movement in deferred tax liability on revalued land
20 – 274 – 274
and buildings determined on the basis applicable
to property disposals 21 – (368) – (368)
Cash flow hedge, net of deferred tax
Remeasurements of defined benefit obligations, 18 – 116 (116) –
net of deferred tax
Transfer from retained earnings in relation to – (896) (116) (1,012)
insurance contingency reserve
– (896) 7,918 7,022
Total other comprehensive income
33 – – (7,092) (7,092)
Total comprehensive income (restated) 28,787 103,425
58,998 15,640
Transactions with owners in their capacity as owners
Distribution to owners:
Dividends to equity holders

Balance at 31 December 2014 (restated)

44 FINANCIAL STATEMENTS

STATEMENTS OF CHANGES IN EQUITY

CONTINUED

Share Retained
capital
€000 Reserves earnings Total
€000
Group continued Notes 58,998 €000 €000
103,425
Balance at 1 January 2015 (restated) 15,640 28,787

Comprehensive income – – 26,411 26,411
Profit for the year
5 – 1,732 – 1,732
Other comprehensive income:
Surplus arising on revaluation of land and buildings 13 – 1,285 – 1,285
Movement in deferred tax liability on revalued land 20 – 59 – 59

and buildings determined on the basis applicable 21 – (159) – (159)
to property disposals
Cash flow hedge, net of deferred tax 18 – (19,216) 19,216 –
Remeasurements of defined benefit obligations,
net of deferred tax 18 – 116 (116) –
Transfer upon realisation of revaluation reserve,
through property disposal effected through spin-off (16,183) 19,100 2,917
Transfer from retained earnings in relation to
insurance contingency reserve (16,183) 45,511 29,328

Total other comprehensive income 33 – – (7,092) (7,092)
33 – – (33,564) (33,564)
Total comprehensive income
– – (40,656) (40,656)
Transactions with owners in their capacity as owners
Distribution to owners: 58,998 (543) 33,642 92,097
Dividends paid to equity holders
Spin-off effected by way of distribution

Total transactions with owners

Balance at 31 December 2015

GO ANNUAL REPORT 2015 45

STATEMENTS OF CHANGES IN EQUITY CONTINUED

Share Retained
capital
€000 Reserves earnings Total
€000
Company (restated) Notes €000 €000

Balance at 1 January 2014 39 58,998 5,271 49,983 114,252
– as previously reported – – 24 24
– impact of mergers of subsidiary undertakings with GO
58,998 5,271 50,007 114,276
– as restated

Comprehensive income – – 16,382 16,382
Profit for the year (restated)
5 – 676 – 676
Other comprehensive income: (restated)
Surplus arising on revaluation of land and buildings (restated) 13 – (203) – (203)
Movement in deferred tax liability on revalued land and 20 – 274 – 274
21
buildings determined on the basis applicable to property 18 – (368) – (368)
disposals (restated)
Cash flow hedge, net of deferred tax – 116 (116) –
Remeasurements of defined benefit obligations,
net of deferred tax – 495 (116) 379
Transfer from retained earnings in relation to
insurance contingency reserve – 495 16,266 16,761

Total other comprehensive income (restated)

Total comprehensive income (restated)

Transactions with owners in their capacity as owners 33 – – (7,092) (7,092)
Distribution to owners: 58,998 5,766 59,181 123,945
Dividends paid to equity holders

Balance at 31 December 2014 (restated)

46 FINANCIAL STATEMENTS

STATEMENTS OF CHANGES IN EQUITY

CONTINUED

Share Retained
capital
€000 Reserves earnings Total
€000
Company continued Notes 58,998 €000 €000
Balance at 1 January 2015 (restated) 123,945
5,766 59,181

Comprehensive income – – 20,066 20,066
Profit for the year

Other comprehensive income:

Movement in deferred tax liability on revalued land 13 – 108 – 108
and buildings determined on the basis applicable
to property disposals

Cash flow hedge, net of deferred tax 20 – 59 – 59

Remeasurements of defined benefit obligations, 21 – (159) – (159)
net of deferred tax

Transfer upon realisation of revaluation reserve, 18 – (264) 264 –
through property disposal effected through spin-off

Transfer from retained earnings in relation to 18 – 116 (116) –
insurance contingency reserve

Total other comprehensive income – (140) 148 8

Total comprehensive income – (140) 20,214 20,074

Transactions with owners in their capacity as owners 33 – – (7,092) (7,092)
Distribution to owners: 33 – – (33,564) (33,564)
Dividends paid to equity holders
Spin-off effected by way of distribution – – (40,656) (40,656)

Total transactions with owners in their capacity as owners 58,998 5,626 38,739 103,363

Balance at 31 December 2015

The notes on pages 48 to 126 are an integral part of these consolidated financial statements.

GO ANNUAL REPORT 2015 47

STATEMENTS OF CASH FLOWS

2015 Group 2015 Company
€000 2014 €000 2014
€000 €000

Year ended 31 December Notes Restated

Cash flows from operating activities 34 43,678 48,778 36,522 45,827
Cash generated from operations
Interest received 15 390 15 65
Interest paid on bank overdrafts
Tax paid (139) (194) (139) (382)
Tax refund received
Payments under voluntary retirement scheme (5,914) (6,669) (3,715) (4,215)
Payments in relation to pension obligations
53 724 – 695
Net cash from operating activities
(686) (2,595) (686) (2,595)
Cash flows from investing activities
Payments to acquire property, plant and equipment (230) (90) (230) (90)

and intangible assets 36,777 40,344 31,767 39,305
Loans advanced to joint venture
Loans advanced to associate (25,901) (20,105) (20,597) (18,857)
– (6,014) – (6,014)
Net cash used in investing activities (4,500) (4,500)
(7,500) (7,500)
Cash flows from financing activities (30,619) (29,371)
Repayments of bank loans (33,401) (28,097)
Dividends paid
Loan interest paid (9,586) (14,771) (9,586) (14,656)
(7,092) (7,011) (7,092) (7,011)
Net cash used in financing activities (1,637) (2,121) (1,637) (2,121)

Net movements in cash and cash equivalents (18,315) (23,903) (18,315) (23,788)

Cash and cash equivalents at beginning of year (14,939) (14,178) (14,645) (13,854)
Exchange differences on cash and cash equivalents
Movement in cash pledged as guarantees 11,604 24,762 10,388 23,220
(71) (23) (78) (21)
Cash and cash equivalents at end of year (187)
(187) 1,043 1,043

16 (3,593) 11,604 (4,522) 10,388

The notes on pages 48 to 126 are an integral part of these consolidated financial statements.

48 FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS
INDEX

1. Summary of significant accounting policies 50
2. Financial risk management 63
3. Critical accounting estimates and judgements 72
4. Segment information 74
5. Property, plant and equipment 76
6. Investment property 81
7. Intangible assets 82
8. Investments in subsidiaries 85
9. Investment in associate 86
10. Non-current assets classified as held for sale – Investment in joint venture 88
11. Loans receivable from subsidiaries, related party and associate 90
12. Other investments 91
13. Deferred tax assets and liabilities 92
14. Inventories 96
15. Trade and other receivables 96
16. Cash and cash equivalents 98
17. Share capital 98
18. Reserves 99
19. Borrowings 101
20. Derivative financial instruments 103
21. Provisions for pensions 104
22. Trade and other payables 108